
Installment loans
I can't figure this problem out at all:
Ned plans to donate $50 per week to his church for the next 60 years. Assuming an annual interest rate of 5.2% compounded weekly, find the present value of this annuity to Ned's church.
The formula we are to use is as follows:
P = Fq [(q^T  1) / (q  1)]
with an installment loan of P dollars paid off in T payments of F dollars at a periodic interest rate of p (written in decimal form), and q = 1/(1+p).
My prof also let us know the following:
For all installment loan problems, assume that the payments are made at the end of the period, so that the current value of the first payment is worth P*q.
For #75 (this problem), assume there are 52 weeks/year.

50[1  1/(1 + .052/52)^(60*52)] / (.052/52) = 47788.69693....
He'll go to heaven for sure (Giggle)

Re: Installment loans
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